(Reuters) – India’s LIC Housing Finance reported a bigger-than-expected third-quarter profit on Friday, helped by healthy asset quality.
The company said its profit after tax for the quarter ended Dec. 31 rose 23% to 14.32 billion rupees ($165.4 million). Analysts had expected a profit of 12.85 billion rupees, according to data compiled by LSEG.
LIC Housing has seen an improvement in asset quality over the last few quarters, leading to lower funds being set aside for bad loans, which has aided its bottom line
Its stage 3 assets, or loans that are overdue for more than 90 days, declined to 2.75% for the quarter from 4.26% a year earlier.
The company also sold a stressed loan asset worth 2.50 billion rupees during the quarter, it said, which helped aid asset quality.
LIC Housing’s loan disbursements grew a muted 2% to 154.75 billion rupees in the third quarter as the housing finance sector continues to see intense competition between home financiers and banks, especially in the premium segment.
The company’s disbursements have been slower than its peers in last few quarters. Earlier this month, PNB Housing’s reported a 30% rise in disbursements for the third quarter.
Its net interest income, the difference between interest earned and paid, fell around 5% to 20 billion rupees.
Net interest margin, a key gauge of profitability, shrunk slightly to 2.70% from 2.71% in the previous quarter against 3% a year earlier.
(Reporting by Nishit Navin in Bengaluru)
